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This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law.

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Edited version of your written advice

Authorisation Number: 1012705007247

Ruling

Subject: GST and Solar powered electricity generation enterprise

Question

Will your supply of solar generated electricity be a taxable supply?

Answer

Yes, your supply of solar generated electricity to an electricity retailer (utility) is a taxable supply for GST purpose as it meets all the requirements of section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST ACT).

That is:

Furthermore the supply of the electricity is not GST free or input taxed, it will be a taxable supply.

Relevant facts and circumstances

You, are registered for GST

You installed a solar electricity generation system on top of your workshop in Australia.

Your system generates $X,000 of excess electricity per quarter and cost you $XX,000. The panels have a 25 year warranty. You installed the system to generate income.

Electricity that is excess to your daily needs is sold into the grid owned by a Utility.

The Utility advised you in a statement that they pay XX cents per kW to GST registered entities and X0 cents per kW to entities that are not registered for GST for electricity sold into their grid.

Your accountant advised you that you are required to remit GST to the ATO on your supplies and you have been reporting GST in your Business Activity Statements (BAS) since installation.

Relevant legislative provisions

A New Tax System (Goods and Services Tax) Act 1999 Section 7-1

A New Tax System (Goods and Services Tax) Act 1999 Section 9-5, and

A New Tax System (Goods and Services Tax) Act 1999 Section 9-20.

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